The AudioFile: Can't They All Just Get Along?

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Face it, DRM is here to stay. Sure there are cracks (thanks DVD Jon!), file-sharing networks, and Bit Torrent, but the fact is many people are still buying digital music online legally. Some pundits say DRM is either doomed to failure or harmful to the consumer experience because of its increasing lack of interoperability, but I see a clear path through the DRM labyrinth. One company in particular, Navio, has been trying hard to create a new paradigm of ownership for digital content—so-called rights-based commerce. So why hasn’t this potentially brilliant idea taken off yet?

It’s not rocket science why purchasing rights to digital music (and other content) is a good idea. You go to an artist’s web site or an online store and purchase the rights to a song, and those rights are stored in a “digital locker”. In some cases, you’d download the appropriately DRM-ed file directly from the site, while in other cases, you would receive a set of license codes for various online stores and download the appropriate file there.

For example, say you purchase a license code for a track off GWAR’s your favorite group’s web site, and you choose Apple’s protected AAC format. If you should later switch from an iPod to a non-Apple player, you could simply use your license code to download the protected WMA of the same track, since you own the rights to the song, not just the file you downloaded. And if you want to play that track on your phone or your work PC, you could just use your trusty license code to download the appropriate files without having to re-buy.

I checked in with Navio last week after having spoken with them over a year ago, and apparently the company has been working like gangbusters to overcome the technical limitations of rights-based commerce. In fact, according to Navio’s COO Ray Schaaf, the technical stuff is entirely out of the way, and now they’re just trying to solidify the business side of things.

I asked Schaaf how he feels DRM is perceived by the music-buying community and by artists.

“I think that musicians want to make sure their content can be readily available for consumers to listen to. Fundamentally what consumers are starting to realize now, as they get more intelligent, is that the interoperability is not working. For example, they’re trying to move stuff from their iPod to their phone, but it’s very hard to do. Consumers don’t want to become system administrators for their content. If people know they’re getting a fair deal, knowing the rights will always be stored in your digital locker, that makes it more valuable than piracy, because your music is essentially backed up in case of data loss.”

This sounds all well and good, but it carries the pungent odor of premium pricing, which is has about as much public appeal as E. coli. Still, Schaaf believes “consumers will pay a reasonable premium for that, because they are buying something different.”

Hmm. I’d like to believe that, but people already whine about how 99 cents for a song is too expensive. If rights to a song will cost anywhere from $1.29 to $1.69 (I’m guesstimating here), I don’t think anyone’s going to jump up and down just because they can get multiple formats and be able to re-download lost tracks easily. Where’s the attention to music lovers’ bargain sense? Subscription music services like Rhapsody to Go cost a lot less in the long run, and they also solve the data backup issue. And although interoperability is still minimal, you can enable more than one device for use with most services.

The only significant advantage of rights-based commerce that really stands out is the ability to get items in multiple formats for multiple devices, which is a nice perk, but it’s not something I truly believe people will understand well enough to pay a premium for. Schaaf maintains that bundling media together (videos, music, ringtones, digital booklets, etc.) is where Navio’s solution will shine, but I think the overwhelming majority of legal digital music buyers will perfectly happy to forego paying extra for something they can’t quite grok in favor of something they perceive as a little more friendly to the bottom line.

AudioFile by Mike Kobrin is a weekly reflection on electronic music and the MP3 biz. You can read his collected columns here.